Administrators to Landsbanki, the failed Icelandic bank behind the Icesave internet deposit account scandal, have accused the firm's former auditors, PricewaterhouseCoopers, of negligence, warning the accounting firm they expect to claim damages on behalf of creditors.

Landsbanki's creditors include more than 100 UK councils which placed a total £900m with Icesave and — unlike British retail savers — were not protected by a deposit guarantee. The negligence allegations set out at a creditors' meeting yesterday relate to PwC's audit of Landsbanki's 2007 accounts and an endorsement of its half-year financial update six months later. In the 2007 accounts, Landsbanki told investors: "Icesave, launched in October 2006, has played a key role in transforming the bank's funding profile."

The accusation against PwC's Iceland operations comes after a year of forensic investigations conducted by a team from Deloitte in London. As well as signalling their intention to pursue damages from PwC, administrators have filed a legal claim against former Landsbanki executives relating to losses of more than 30bn kronur (£165m).

It is the second time PwC's Icelandic branch has been accused of major failings in the months preceding Reykjavik's 2008 financial meltdown, which felled all three of the tiny country's outsized banks — Landsbanki, Glitnir and Kaupthing — and forced officials to seek a bailout from the International Monetary Fund.

In its capacity as auditor of Glitnir, PwC was named as a defendant in a legal claim brought by US bond investors in New York in May. The case accuses Baugur retail tycoon Jon Asgeir Johannesson of leading "a sweeping conspiracy to wrest control of Glitnir and fraudulently drain more than $2bn out of the bank to fill their own pockets and prop up their own failing companies".

Of PwC's role at Glitnir, the claim alleges "defendants could not have succeeded in their conspiracy without the complicity of PwC.PwC ... knew what Glitnir's true related party exposure was, reviewed and signed off on financial statements which grossly misrepresented Glitnir's related party exposure."

Separately, forensic accountants from PwC in London have been hired by administrators to Kaupthing to investigate suspicious transactions entered into by the bank in the months before its collapse.